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Investing.com - Piper Sandler has reduced its price target on monday.com Ltd. (NASDAQ:MNDY) to $300 from $325 while maintaining an Overweight rating on the stock. The company’s shares currently trade at $178.89, down over 30% in the past week, with InvestingPro data showing the stock’s RSI indicating oversold conditions.
The firm characterized the recent 25% sell-off in monday.com shares as "overdone" following what it described as just a 0.4% reset to the company’s second-half outlook, suggesting investors should "buy the weakness." According to InvestingPro analysis, the company maintains strong fundamentals with impressive gross profit margins of 89.5% and a healthy current ratio of 2.57, indicating solid financial stability.
Piper Sandler noted that monday.com’s multi-product momentum continues to build, with its Customer Relationship Management (CRM) solution crossing the $100 million annual recurring revenue (ARR) threshold, while maintaining confidence the company can sustain 20%+ growth and 25%+ free cash flow margin.
The firm acknowledged two challenges to the company’s second-half growth outlook of 24%: Q2 marked the first quarter with reported growth below 30%, and the core Work Management ARR might moderate below 20% for the first time as multi-product momentum builds.
Despite lowering estimates, Piper Sandler views the significant sell-off as a buying opportunity in what it considers a "high-quality franchise," dismissing concerns that total ARR growth could fall below 20% next year as "too pessimistic" given cross-sell opportunities, new AI products, and the mix shift to CRM which is growing at triple-digit rates. With revenue growth of 32.25% in the last twelve months and 15+ additional insights available on InvestingPro, including detailed valuation metrics and growth forecasts, investors can access comprehensive analysis to make informed decisions about monday.com’s potential.
In other recent news, monday.com Ltd. has been the focus of several analyst updates following its second-quarter 2025 results. Morgan Stanley (NYSE:MS) upgraded the company’s stock rating to Overweight, though it adjusted its price target downward to $260. Wolfe Research also lowered its price target to $220, maintaining an Outperform rating, citing mixed results in upmarket segments and challenges in downmarket areas due to changes in Google (NASDAQ:GOOGL)’s algorithm. JPMorgan adjusted its price target to $285, keeping a Neutral rating on the stock. DA Davidson reduced its price target to $275, attributing the change to decreased demand from small and medium-sized businesses affected by Google’s Search algorithm changes, while still rating the stock as a Buy. Oppenheimer lowered its price target to $300, noting that despite solid second-quarter results, the revenue upside did not lead to stronger guidance for the third quarter or the full year of 2025. These developments reflect the company’s ongoing strategic shifts and the challenges it faces in adapting to current market dynamics.
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